Google’s new ad push? Yawn

July 1, 2008, 12:03 PM UTC

By Yi-Wyn Yen

Google stirs up hype wherever it goes. Last week, Google introduced a free product called AdPlanner to help media agencies find the best sites to place banner ads. The news shook up comScore, which offers similar Web-tracking information for a fee, as its shares took a 23% nosedive the day the new Google service was announced. 

Fears that AdPlanner would crush Internet media research companies like comScore (SCOR) and privately-held Nielsen Online were overblown. Mark May, an Internet analyst with Needham & Co. said several companies that use comScore told him they weren’t impressed. AdPlanner, he said, is “just not as robust and doesn’t have all the functionalities that comScore has. It’s not an immediate risk for comScore.” A Nielsen Online executive said in a statement that the company has a business agreement with Google (GOOG) to provide its TV demographics to Google’s online platform for TV ads, and supports the new online ad offering.

Google’s new ad tool may have rattled the online measurement industry, but competitors say they’re not scared of the search giant. Quantcast, a San Francisco-based startup, points out that it released a similar product to identify the demographics of a Web audience two weeks before Google did. “We had expected Google would attempt audience measurement. It’s the next logical step from them,” said Adam Gerber, Quantcast’s chief marketing officer. “The important point to remember is that Google has launched lots of services into the market in the past five years, but plenty of them have not gotten off the ground.”

Meanwhile, ComScore CEO Magid Abraham tested the new service and says that comScore’s paid offerings were far superior. “The first look that we have of the data is a sigh of relief,”  Abraham said during a conference call Thursday hosted by Deutsche Bank.

A Google spokesman was not available for comment.

Google is an easy target for criticism whenever it challenges an established industry outside of its core search advertising business. The company has gained a lot of new “frienemies” as it steadily expands its empire. And because of its tremendous success in paid search, expectations for Google to flourish in other areas are high. 

Some welcome Google’s new move into the media planning business. Kelly Towhig, a senior executive at Starcom agency, is testing the new Google AdPlanner tool to help her figure out the best Web sites to buy ad space for her clients, which include Nintendo, ESPN and AllState. “We love nothing more than having incremental data. We collectively believe this is a great first attempt by Google,” she said. Towhig says AdPlanner is a good supplement to the data she receives from comScore and Nielsen.

Those who aren’t affected by Google’s new venture also applaud the service. “I think this will bring more companies into the online marketing space, specifically because of the price point since it’s free,” said Marc Johnson, the chief marketing officer of Hitwise, an online marketing company that researches internal data for publishers. The company, along with Coremetrics and Omniture (OMTR) competes with another Google product, Google Analytics.

Danny Sullivan, a search industry expert with Search Engine Land, notes that these digital marketing companies have continued to survive despite Google’s footprint in the market. He said, “Google has released another set of tools that is interesting, but is not going to kill others.”

In case Google’s AdPlanner is the next killer product, comScore’s Abraham says the company is prepared. ComScore’s shares have climbed up since Google’s news, but remain 18% below where they opened last Monday, the day before Google announced AdPlanner. “The doomsday scenario is that this will take over ad agencies because Google is free. If we absolutely have to, we’ll just give the damn thing away for free to agencies too,” he said. “For now, we’re staying put.”